How it works

In order to understand the heavy criticism and controversy that Telebid caused in its home country it is necessary to understand the basic concept of the whole thing, i.e. how Telebid works. I’ll do my best to explain.
Telebid sells brand new stuff through a unique bidding system. Those can be products such as ipods, LCD-TVs or even cars.  Every product starts at a ridiculously low price to attract the maximum number of potential buyers. Everybody who is interested in buying can express their interest by placing a bid. As soon a bid has been placed a countdown for that specific product is set in motion. It counts down a specific amount of time, e.g. 15 seconds. Should this countdown elapse with nobody else placing a bid, the last bidder gets to buy the product at the current price. The current price is determined by number of bids on that products, meaning it increases marginally with every bid that has been placed.

A ficticious example to illustrate the concept: A brand new car is offered by telebid at a starting price of 1 GBP.  Approx. 500 visitors decide that they are interested in buying a car at that price. Visitor 1 places a bid – the price of the car goes up by 10 pence. The timer for this product starts counting down from 15 seconds. Within these 15 seconds visitor 2 decides that the car is still worth buying at 1,10 GBP and places a bid when the counter shows 5 seconds to go. Again the price goes up by 10p.  The timer restarts its counting from 15 seconds.  Now visitor 3 decides to place a bid… and so on.
Clear?
So assuming each of those 500 people that initially saw the car popping up on the telebid website actually decide to place a bid the price would be at 61 GBP which would still be a pretty good bargain for a brand new car, wouldn’t it?

What’s in it for Telebid?
Reading telebid’s aggressive advertising slogans you are lead to believe that you can save tons of money by obtaining products at 90% off the retail price. Indeed, browsing through some old telebid “auctions” gives the impression that telebid users buy products for quite a bit less than their worth. So how does Telebid finance the whole thing? After all there are not just bills to pay for the products telebid is selling. The whole thing needs to be highly profitable as well. Especially since Wellington Partners, the primary investor behind Telebid has pumped 3 million Euros into the startup.
To understand how telebid can afford to sell products below their retail price and still make huge profit will become clear when I tell you that visitors have to pay for each bid they place. 50p to be quite exact.  So take the example from above with 500 people having bid on a brand new car. If you care to calculate Telebid will already have earned 250 GBP by the time the price of the car has reached 61 GBP.  Now, considering how many hundreds of people visit the telebid page at any given moment, how likely do you think it might be that during the bidding of those 500 people (approx. 10 minutes) another 500 will have decided that 61 GBP is a pretty good bargain?
In the end the car might sell at a bargain price of 5,001 GBP but telebid will cash in the 5001 plus 25,000 GBP through bids.

What’s in it for you?
Not much unless you enjoy a good thrill and are willing to pay accordingly. But then you might want to check the nearest casino in your neighbourhood. My bet is, you’ll get more a hell of a time out of it there and even get away with loosing less of that precious cash than with telebid. No, seriously!  Consider the odds. You COULD end up being the lucky one betting exactly within those 15 seconds when everybody else has lost interest. But then you COULD also win the lottery… Or you could end up as one of those 999 bidders that (together) paid 25,ooo pounds without getting anything out of it but a momentary thrill of dreaming about a bargain. Convinced? If not I am curious as to how many lost bids is it going to take to convince you. Go ahead and try it!
I am looking forward to reading your experiences in the comment section below!

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10 Comments

  1. Thanks, that info helps me to ensure that I’ll give it a try but keep total control.

  2. Hi, After reading through your page I am quite sure I wont be using telebid very much for bidding,I now intend to browse more than bid and look for times I think would give me a chance to grab that first and only bargain.I think whoever thought this site up is an artist in con. I only wish I had a few shares in the company or that I had thought of it first. What a great idea on how to make a million in a day! This company is making a fortune on a daily basis.
    Thanks again for the insight into the biggest con (legal) I have ever encountered other than a Goverment Budget!
    Susan

  3. Hello from Spain. Telebid.es has become to Spain.

    You have forgotten to explain the bidbutler. People dont know how Bidbutler works. Perhaps you can write an article explain it.

    Thanks for all the information.

    Lolo

  4. hi! can you explain why a bidbutler keeps bidding even hes not getting any savings at all. kindly look at this weblink for example.

    http://www.telebid.com/auction/nintendo-ds-lite-crimson-red-and-black-/81576.html

    in this link, the placed bids (of the winner) is 273 which cost him £136.50 but still he keeps on bidding even the price of the item reaches £79.03 and the item only worth £99.99. is it a strategy or a decoy?

  5. Hi Krugger,

    Isn’t the users fault that they let bit butller running. Its not uncommon in auctions people overbid to the estimated cost of product.

    Now if one person wants desperately a product and he puts bid buttler on and goes to work assuming he will eventually win the product. Whose fault is this.

    People are here to make money not to do charity. If people are being stupid its their fault.

    You can make informed decision about not bidding or not using telebid but don’t try to defend someone elses stupidity.

    ciao

  6. Andy I am sure you can write better than how Telebid explains things. Also you have assumed that its a con when people have options to read FAQ, Help etc.

    Do you think people who bid there are stupid. You can get an excel file, analyse when people are winning less or more and bid in right times. Do you think you can do that in casino’s?

    Can you do some analysis on what % of people really win and what % losses telebid had?

    They have comeup with a new business model which has barely started working and I guess you will love to support ebays of world who are really not innovating to a large extent.

    But since you are the thought leader you may know better.

  7. Telebid has copied the idea from http://www.fiksuhuuto.fi

    Fiksuhuuto.fi has founded in Finland january 2008. It’s world’s first cent bid auction.

  8. Telebid was launched in 2006, so it was and is the first of its kind.

    A better one is coming to the UK, launches in December and is designed to be fair, and reveal all the pitfalls that Telebid/Swoopo hides.

    Firstly, the auctions start at half the value of the item or less.
    Secondly every bid drives the price down instead of up.
    Thirdly there are several auction types, each which allows you to develop a skill by introducing a second button.
    This second button enables you to manipulate the auction, so you can try and gain the advantage, rather than blindly bidding, hoping that someone does not bid against you.

    This does it for me, price going down and being able to actually develop a skill method rather than blindly hitting bid.

    Anyway if you want to check it out they are having a free prizedraw for a PS3. Its for UK only and entry has to be 18 or over.

    http://www.priceplummet.co.uk

  9. LCD TVs are the mainstream stuff that you can buy today but their contrast ratio isn’t that great compard to CRT’s _

  10. LCD TVs can really save you from high electricity bills and office space ~,*


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